Will it work without you?
How involved should you be inside of businesses you own?
When I started spending more time on the investment and advisory side of building businesses instead of simply mentoring them, I came head-to-head with a very important question…
“How involved should I be in these businesses?”
If acquiring more businesses makes it so that all you do is have to use more and more of your time, connections, and money—and it can’t survive without you—does it even make sense?
This is even more relevant when you have money, influence, audience, and expertise because using those things is as essential as simply having them.
I can push forward all of the businesses I own. However, how can I do that without constraint? Especially if…
The business now has “fake” growth that was “borrowed” from me.
The business now isn’t as easy to sell without having me involved.
The business has diluted my brand, influence, and focus.
The business has created reliance upon me.
I often see Entrepreneurs investing in a partner who then starts to grow their business quickly using a certain set of unfair advantages.
The problem is that unless you’re looking to add more to your plate, you’re building a business that relies on you—which isn’t really a business.
Generally, this also means that the businesses you acquire may grow more slowly than you’re used to.
A lot of the time—and I’ve made this mistake in the past—you assume you can grow a business that you own as efficiently as the one that you’re actively building or that you’ve grown in the past.
And while the assumption isn’t always untrue, I argue that you probably shouldn’t make it simply because of those 4 reasons above.
So, the question then becomes… How do you decide how to be involved in the businesses you acquire?
This is very much a personal choice that comes down to…
What you can bring to the table
What the business needs
What level of profit and growth is needed
Whether you can step back out after you step in
And more than anything, ask yourself… If I supercharge the growth, is it sustainable if I leave? This question is critical.
If you supercharge the growth and you lose interest—or you leave it and then it slows the growth—generally, both the growth rate and the profit margin will be hit so hard that you may never be able to sell it.
This happens because, as a growth-focused Entrepreneur, you can make things happen easier and more swiftly than those you can hire—at least most of the time.
Take my website builder for coaches/consultants, for example.
Across all of my platforms, under my Scott Oldford brand, I have nearly a million people that follow my stuff—some a lot, some very little.
Regardless, roughly 1 million people know who I am, and many look up to my advice. If I put that business in front of my audience, I could generate $500K - $1M in under a year.
But there are problems with this approach…
It doesn’t solve the underlying marketing and sales issues.
It doesn’t require that the business has its own way of generating new customers.
If that much lead flow occurs, it will break the business and operational model.
If I attempt to sell it in the future, it will be heavily devalued.
Thus, I’m left with the question… “How am I involved?”
Using the same example, I’ve spent the last 90 days building the infrastructure and systems, redesigning the offer, and marketing. I’ll spend the next 90 days tuning that up further.
From there, I will promote it to a sub-segment of my audience to generate $100K, enough to pay for the investment and give the business ample capital to continue. I will then reinvest all of that money.
After, I will integrate the business with affiliates and partners, both those I own and others that make sense. Instead of building the business around me as the main revenue driver, I’m giving it a little “boost” of exposure (and revenue) and then allowing it to continue onwards through its growth path, allowing it to create value through its team and value proposition.
This takes a lot of patience because it’s not the “Entrepreneur-led” way of running a business…
The Business Owner (the personality I've been talking about here) isn’t about growth at all costs but being able to align all elements of the business, including not putting all their eggs in one basket.
On top of patience, it also means that your desire to “turn it to gold” might take a back seat. Working with people in my mentorship business is generally entrepreneur-led, and I generally see 2-10X growth in the first 12 months of working with someone.
That generally doesn’t happen in this model.
So the questions I always ask myself when I’m in a business are…
How involved do I need to be?
How involved do I want to be?
After clarifying, I build the plan for my level of involvement.
Every business is different, and every business will have different “ingredients” for success…
The most important element is knowing what is in alignment for you and the business and knowing that what you “go to” now may not be the “go-to” for the other businesses you acquire or partner with…